i 

THE 

COMMERCIAL  INTERESTS 

OF  NEW  YORK. 

AS  RELATED  TO  OUE  SYSTEM  OF 

TRANSPORTATION. 


IVo.  -2. 


r 


J 


TO  THE  MEKCHANTS 

01 

NEW  YORK  CITY. 


In  the  President's  last  message  we  find  these  words: 

The  attention  of  Congress  will  be  called  at  its  present  session  to  enterprises  for 
the  more  certain  and  cheaper  transportation  of  the  constantly  increasing  surplus  of 
the  Western  and  Southern  products  to  the  Atlantic  seaboard.  The  subject  is  one 
that  will  force  itself  upon  the  legislative  branch  of  the  Government  sooner  or  later, 
and  I  suggest  that  immediate  steps  be  taken  to  gain  all  available  information  to 
inevitable  aDd  just  legislation  regarding  a  route  to  connect  the  Mississippi  valley 
with  the  Atlantic. 

That  production  increases  more  rapidly  than  the  means  of  transportation  in  our 
country,  has  been  demonstrated  by  past  experience. 

The  rapid  growth  in  population  and  products  of  the  whole  country  will  require 
additional  facilities,  cheaper  means  for  the  more  bulky  articles  of  commerce  to 
reach  tide-water,  and  that  a  market  will  be  demanded  in  the  near  future  is  equally 
demonstratable. 

I  would  therefore  suggest  either  a  committee  or  commission  to  be  authorized  to 
consider  this  whole  question,  and  to  report  to  Congress  at  some  future  day  for  its 
better  guidance  in  legislating  on  the  important  subject.  The  railroads  of  the 
country  have  been  rapidly  extended  during  the  last  few  years  to  meet  the  growing 
demands  of  producers,  and  reflect  much  credit  upon  the  capitalists  and  managers 
engaged  in  their  construction. 

In  addition  to  these  a  project  to  facilitate  commerce  by  the  building  of  a  ship 
canai  around  Niagara  Falls,  on  the  United  States  side,  which  has  been  agitated  for 
many  years,  will  no  doubt  be  called  to  your  attention  this  session. 

Looking  to  the  great  future  of  the  country,  and  the  increasing  demands  of  com- 
merce, it  mignt  be  well,  while  on  this  subject,  not  only  to  have  examined  and  re- 
ported upon  the  various  practicable  routes  for  connecting  the  Mississippi  with  the 


AA 

^7 
N4T(» 

J  Cll 

•<5e-water  of  the  Atlantic*  btit  the  feasibility  of  *n  «hsw§t  continuous  !an<5-locke4 

navigation  lrom  Maine  to  the  Gulf  of  Mexico. 

And  the  truth  and  wisdom  of  the  above  has  become  more  evident 
each  day  that  has  elapsed  since  it  was  written.  In  accordance 
with  the  above  suggestion  the  Senate  appointed  a  Committee,  of 
which  Senator  Windom,  of  Minnesota,  is  Chairman,  to  make  inves] 
tigation  daring  the  recess  and  report  at  next  session  of  Congress, 
The  Committee  are  now  at  work,  and  will  probably  occupy  the 
entire  fummer  in  gathering  information  and  material  for  their  re- 
port. In  a  late  report  of  the  Chicago  Board  of  Trade  we  find  the 
following  : 

The  means  and  cost  of  transportation  have  probably  engrossed  a  larger  share  ©f 
public  attention  during  several  years  past  than  any  other  question  of  public  con- 
cern, and  the  proper  remedies  lor  the  evils  under  which  this  country  is  laboring  do 
not  £>v,yn  to  have  as  yet  been  devised.  Certainly  it  is  a  subject  worthy  of  the  most 
earnest  consideration,  for  upon  its  issue  depends  the  prosperity  of  the  whole  coun- 
try, especially  that  portion  of  it  largely  devoted  to  agricultural  pursuits.  When,  as 
now,  it  costs  the  farmer  in  many  cases  from  one-half  to  three-quarters  of  the  value 
of  his  crop  to  transport  it  to  market,  the  question  of  that  cost  present  itself  to  his 
mind,  justly,  as  one  of  vital  importance.  Waiving  any  discussion  in  this  place  in 
regard  to  the  efforts  that  have  been  made  looking  to  some  degree  of  control  over 
the  railway  charges  in  this  and  other  States,  and  of  the  results  thus  far  attained  in 
that  direction,  the  subject  of  transportation  eastward  may  properly  be  alluded  to. 
That  the  rates  current  for  the  past  year  or  two  must,  if  possible,  and  by  some 
means,  be  reduced,  is  apparent  to  all.  Enlarged  facilities  and  increased  competi- 
tion by  rail  will,  it  is  hoped,  at  an  early  day,  at  least  partially  relieve  the  West  from 
its  embarrassment,  and  various  proects  are  suggested  looking  to  this  end.  No  en- 
tirely new  lines  from  Chicago  to  the  seaboard  have  been  opened  for  about  fifteen 
years,  during  which  time  the  Northwest  has  more  than  doubled  in  population  and 
production;  true,  facilities  have  been  greatly  increased,  and  new  competition  over  parts 
of  the  route  has  been  established,  but  wholly  independent  lines  are  now  no  more 
numerous  than  then,  nor  is  there  any  immediate  prospjet  of  r  Jief  in  this  direction, 
^That  the  National  Government  is  in  duty  bound  to  adopt  some  measure  for  the 
relief  of  the  most  important  interest  in  the  country  seems  to  be  largely  conceded, 
and  projects  looking  to  this  end  are  numerous,  the  friends  of  each  pressing  it  with 
a  vigor  worthy  of  the  importance  of  the  subject.  It  must  be  conceded  that  the  most 
effectual  competition  is  that  furnished  by  an  unrestricted  and  free  water  route. 
No  better  illustration  of  this  can  be  afforded  than  the  fact  that  the  business  of 
grain  carrying  from  Chicago  to  Buffalo  by  lake  is  profitable  at  six  cents  per  bushel, 
while  railroad  companies  claim  it  is  not  remunerative  from  Chicago  eastward  an 
equal  number  of  miles,  at  less  than  from  three  to  five  times  that  sum.  Assuming 
that  there  is  at  least  a  large  difference  in  the  two  modes  of  transportation  in  favor 
Of  that  by  water,  it  would  then  seem  that  the  first  duty  of  the  government  would 
</se  to  exert  its  influence  to  open  up  all  possible  facilities  in  that  direction. 

9  The  report  of  the  Detroit  Board  of  Trade  says : 

The  fact  is  forced  upon  the  attention  of  all  interested  in  the  welfare  of  the  great 
grain-prolucing  centers,  that  something  must  be  done  immediately  to  reduce  the 


s 


eost  of  moving  onr  leading  cereals  to  the  seaboard,  and  to  fh#  great  centers  of  eea» 
■umption  in  Europe.  Corn  at  6-5  cents  and  oats  at  43@48  cents  at  the  seaboard  will 
not  pay  the  cost  of  marketing  in  many  parts  of  Southern  Illinois,  Iowa  and  con- 
tiguous States,  saying,  nothing  of  the  cost  of  production.  The  great  question  of 
cheap  transportation  demands  attention  and  solution,  and  cannot  longer  be  dfe- 
ferred. 

That  the  words  of  the  last  two  lines  are  true  is  evident  from  the 
fact  that  the  producers  of  the  West  have  begun  organizing  on  this 
issue  ;  and,  although  it  is  but  a  few  months  since  the  first  association 
known  as  a':  Grange  "  was  formed  in  Illinois,  thej  have  already 
spread  over  nine  States,  with  a  voting  membership  of  nearly  four 
hundred  thousand. 

THE  CAUSES 

which  have  led  to  this  great  movement  are  the  abuses  which  haTfr 
grown  up  with  our  system  of  transportation,  although,  doubtless*  tks 
great  increase  of  the  producing  capacity  of  the  country  may  kfiVfc 
had  something  to  do  with  it .   The  abuses,  however,  form  the  largest 
portion  of  the  burden  which  have  borne  so  heavily  upon  the  produc- 
ers of  the  West,  and  which  are  now  "  the  old  man  of  the  sea "  upon, 
the  shoulders  of  the  commerce  of  the  whole  country.    Our  commerce- 
is  taxed  with  rates  of  freight  designed  to  pay  dividends  upon  a  tre- 
mendous nominal  or  fictitious  capital.    There  is,  nominally,  about 
five  thousand  millions  of  capital  invested  in  railways  in  the  United 
States,  and  it  has  been  estimated  by  experts  that  not  more  than  two 
thousand    millions    have  been  actually  expended  in  building  them. 
Roads  have  been  built  upon  mortgage  b'onds,  and  the  stock  divided 
among  the  projectors  without  equivalent;  and  yet  the  public  are. 
taxed  to  pay  both  interest  upon  bonds  and  dividends  upon  the  ctock^ 
In  many  instances,  dividends  have  V.-en  so  large  that  the  stock  had 
to  be  watered  lest  the  enormous  dividends  should  attract  attention 
and  awaken  public  indignation.    A  favorite  method  of  late,  to  rob 
the  public,  has  been  to  "  capitalize  surplus  earnings     or,  in  other 
words,  to  first  extort  money  from  the  public  by  exorbitant  char  ges, 
then  issue  stock  representing  it,  then  increase  the  tariff  of  freight 
charges  so  that  dividends  may  be  declared  upon  it — in  fact,  making 
tre  people  pay  interest  upon  the  money  which  had  been  stolen  from 
them. 

Every  road  has  its  "  Credit  Mobilier  "  fast  freight  line,  the  officers 
of  which  are  also  officers  of  the  railway,  and  grant  special  privileges 
to  the<ie  lines  who  take  the  cream  of  the  business  and  charge  what 
they  please.    The  spectacle  is  often  seen  at  the  West  of  a  shipper 


4 


applying  at  the  railway  offices  for  cars  and  is  told  they  have  none, 
but  he  can  get  them  across  the  street  at  the  office  of  the  Blue  or 
Green  or  Red  or  White  line,  as  the  case  may  be.  It  is  notorious 
that  the  "  fast  freight  lines  "  are  under  heavy  expenses  for  offices, 
agents,  and  officers,  and  yet  declare  tremendous  dividends  upon  their 
stock.  Many  railroad  m3n  can  be  pointed  out  who,  five  years  since, 
were  penniless,  and  who  to-day  are  millionaires  ;  and  this,  bear  in 
mind,  happens  during  five  years  of  a  general  shrinkage  in  values  and 
retrenchment.  Is  it  any  wonder  that  legitimate  business  should  lan- 
guish and  the  labor  of  producers  prove  unremunerative  when  they 
are  overtaxed  as  above  stated  ? 

Thus  we  see  that  two  distinct  sets  of  stockholders  subsist  and 
flourish  upon  the  commerce  *>e  country — the  stockholders  of  the 
railways  and  the  stockholders  or  the  last  freight  lines — both  of  whom 
keep  up  expensive  organizations  for  which  the  people  have  to  pay. 
In  investigating  still  further,  we  find  rings  in  the  management  of 
nearly  all  the  roads  which  charge  the  companies  two  or  three  prices 
for  all  their  supplies,  and  with  the  best  managed  companies,  lavish 
expenditure  and  extravagance  is  the  rule  rather  than  the  exception. 

I&  is  a  notorious  fact  that  the  greater  part  of  the  corruption  to  be 
found  in  our  halls  of  legislation  proceeds  from  the  great  corporations 
while  seeking  legislation  opposed  to  the  interests  of  the  public.  As 
an  evidence  of  the  great  amounts  annually  worse  than  squandered 
in  this  way,  the  following  extract  from  the  report  of  the  legislative 
committee,  which  recently  made  the  investigation  into  the  manage- 
ment of  the  Erie  Railway,  may  be  interesting  and  instructive  : 

It  is  further  in  evidence  that  it  has  be9n  the  custom  of  the  managers  of  the  Erie 
Jiailway,  from  year  to  year  in  the  past,  to  spend  large  sums  to  control  elections  and 
to  influence  legislation.  In  the  year  1868,  more  than  $1,000,000  was  disbursed 
from  the  treasury  for  *•  extra  and  legal  services."  For  interesting  items  see  Mr. 
Watsona's  testimony,  pages  336  and  337. 

Mr.  Gould,  when  last  on  the  stand  and  examined  in  relation  to  various  vouchers 
shown  him,  admitted  the  payment,  during  the  three  years  prior  to  1872,  of  large 
Bums  to  Barber,  Tweed,  and  others,  and  also  large  sums  drawn  by  himself,  which 
might  have  been  employed  to  influence  legislation  or  elections;  these  amounts  were 
charged  in  the  India  rubber  account."  The  memory  of  this  witness  was  very  de' 
fective  as  to  details,  and  he  could  only  remember  large  transactions;  but  could  dis- 
tinctly recall  that  he  had  been  in  the  habit  of  sending  money  into  the  numerous 
districts  all  over  the  State,  either  to  control  nominations  or  elections  for  senators 
and  members  of  assembly.  Considered  that,  as  a  rule,  such  investments  paid  better 
than  to  wait  till  the  men  got  to  Albany,  and  added  the  significant  remark,  in  reply 
to  a  question,  that  it  would  be  as  impossible  to  specify  the  numerous  instances,  as  it 
would  to  recall  to  mind  the  number  of  freight  cars  sent  over  the  Erie  road  from,  day 
to  day.  '*(See  testimcoy,  p.  556.) 


5 

It  is  not  reasonable  to  suppose  that  the  Erie  railway  has  been  alone  in '  le  corrupt 
use  of  money  for  the  purposes  named;  but  the  sudden  revolution  in  the  V  rection  of 
this  company  has  laid  bare  a  chapter  in  the  secret  history  of  railroad  m^iagement, 
such  as  has  not  been  permitted  before.  It  exposes  the  reckless  and  prodv,?al  use  of 
money,  wrung  from  the  people  to  purchase  the  election  of  the  people's  represent- 
atives, and  to  bribe  them  when  in  office.  According  to  Mr.  Gould,  his  operations 
extended  into  four  diffeient  States.  It  was  his  custom  to  contribute  monej  to  influ- 
ence both  nominations  and  elections. 

What  the  Erie  has  done,  other  great'  corporations  are  doubtless  doing  fi  >m  year 
to  year.  We  have  here,  simply  an  acknowledgment  of  the  fact.  Combined*  as  they 
are,  the  power  of  the  great  moneyed  corporations  of  this  country  are  a  standing 
menace  to  tha  liberties  of  the  people. 

The  railroad  lobby  flaunts  its  ill-gotten  gains  in  the  faces  of  our  legisla- 
tors, and  in  all  our  politics  the  debasing  effect  of  its  influence  is  felt. 

The  report  further  says  : 

This  vast  interest  has  grown  up  mostly  within  the  last  twenty-five  years.  And 
the  railroad  system,  in  its  material  aspects,  is,  to-day,  a  proud  monument  to  the  in- 
dustry, enterprise,  and  progress  of  the  country  and  of  the  age,  and  should  receive 
generous  treatment.    But  in  this  free  growth  there  is  danger.    Restrictions  which 
seemed  ample  when  these*enterprises  were  in  their  infancy,  and  when  the  country 
was  struggling  for  internal  development,  are  now  quite  inadequate.    At  the  time  of 
the  formation  of  our  governments,  State  and  national,  and  for  many  years  afterward, 
the  water  routes  were  the  great  channels  of  internal  commerce;  no  one  dreamed 
that  they  could  ever  be  controlled  by  a  few  men.    But  railroads  have  revolutionized 
traffic;  and  the  danger  that  was  not  then  imagined  is  now  an  existing  calamity. 
These  franchises,  which  were  granted  to  subserve  public  uses,  and  to  wkich  private 
interests  were  compelled  to  yield,  have  been,  in  many  cases,  perverted  to  specula- 
tive purposes,  and  the  establishment  of  practical  and  grinding  monopolies,  reducing 
to  a  moiety  the  income  of  the  producer,  and  increasing  to  exorbitance  the  prices  of 
the  necessaries  ot  life  to  the  consumer.  0 
4  Corporate  wealth  has  gone  on  increasing  to  an  alarming  extent,  vast  private  for- 
tunes have  been  accumulated  by  the  men  who  control  and  operate  our  railways,  and 
these  advantages  they  are  not  quick  to  relinquish.    The  business  interests  of  the 
country  are  demoralized  by  the  mania  of  stock  gambling  rendered  hazardous  by  the 
constant  watering  of  stocks,  by  which  a  fictitious  value  is  imparted  to  railroad 
securities,  which  would  otherwise  be  stable,  and  traffic  is  hence  unduly  taxed  to 
secure  them  a  value.    Another  evil  is  the  indiscriminate  bonding  of  towns  and 
municipalities  for  railroad  construction.    Withal  come  rivalries  and  the  continual  I 
reaching  out  for  additional  advantages  through  legislation. 

The  evil  is  deeply  seated,  and  no  superficial  remedy  will  be  adequate  for  its  cor- 
rection. No  law  that  the  committee  can  recommend  at  this  late  day  of  the  session 
will  reach  the  entire  case,  but  they  will  take  the  liberty  to  suggest  that,  in  their 
opinion,  the  relief,  will  be  found  in  some  enlightened  system  of  general  railway  legis- 
lation, regulating  the  rate  of  transportation,  prohibiting  the  issue  of  fictitious  stocks,  ' 
and  punishing  with  heavy  penalties  the  misappropriation  of  the  funds  of  the  com- 
pany by  the  managers  thereof,  whether  to  their  personal  uses  or  to  corruptly  influ- 
ence legislation  affecting  their  interests. 

*Tbere  should  also  be  enacted  some  uniform  system  for  the  keeping  of  railroad 
accounts  and  the  manner  of  declaring  dividends,  so  that,  while  on  the  oce  hand  the 


6 


stockholder  may  share  in  the  actual  profits,  on  the  other,  the  obligations  of  com- 
panies shall  not  be  increased  from  year  to  year  by  loans  to  make  good  fictitious 
'Statements  of  net  earnings.  On  one  subject,  at  least,  your  committee  believe  that 
legislation  should  be  had  without  delay.  There  is  now  under  existing  statute  abso- 
lutely no  security  to  stockholders  in  regard  to  the  leasing  of  one  roa  d  by  another.  A 
siAjority  of  the  board  of  directors  may,  without  consent  of  their  stockholders,  lease 
Cors-ach  a  period  of  years,  and  upon  such  terms  as  would  be  equivalent  to  a  consoli- 
<&ation  of  interests. 

STour  committee  believe  that  lome  proper  restriction  is  necessary  rot  only  to  pro- 
tect the  public,  but  the  railroad  interest  itself,  and  the  law  should  apply  not  to  one 
company  alone,  but  should  be  general  in  its  scope.  They  have  therefore  prepared, 
ita.4  presented  in  connection  with  their  report,  a  bill  regulating  leases  of  connecting 
•loads,  and  prohibiting  the  leasing  of  competing  parallel  lines. 

In  conclusion,  your  committee  have  endeavored  to  discharge  the  duty  delegated 
$o  them  so  far  as  time  and  circumstance  would  allow,  with  a  desire  to  deal  justly  by 
«JtI  parties,  and  herewith  submit  the  evidence  taken,  with  their  conclusions  thereon, 
<3f«tpectivel>  for  the  consideration  of  the  House. 

ISAAC  fl.  BABCOOK, 
C.  S.  LINCOLN, 
AMHERST  WRIGHT,  Jr., 
CHARLES  CRARY, 
JACOB  B.  CARPENTER, 
May  l&th,  1873.  Select  Committee. 

The  following  extract  is  from  the  speech  of  J.  H.  Rowell,  made 
before  the  Farmers'  Convention  held  at  Bloomington,  111.,  Ia8t  Jan- 
uary.   Speaking  of  our  railway  system,  Mr.  Rowell  said: 

It  has  been  a   magnificent  advance  towards  greater  physical  comfort  and 
higher   moral    and    mental    culture    for    all    the    people.     And   so  the 
«a&way  system  has  become  a  permanence.    We  cannot  abandon  it  if  we  would, 
ought  not  if  W9  could.    It  is  a  part  of  the  world's  wealth;  like  a  great  truth,  it 
"5s  «Yerj  body's  right  to  have  and  enjoy.    But  truth,  sometimes,  affords  a  splendid 
'©orer  far  falsehood.    The  more  valuable  a  thing  is,  the  mot*  dangerous  it  becomes 
'W&.en  its  use  is  perverted.    I  know  of  nothing  of  which  this  can  be  said  with  more 
trath  than  of  the  railway  system.    Needed,  imperatively  demanded,  we  were  so 
<OT©rjoyed  at  its  ooming  that  we  neglected  to  shut  the  gate  against  its  attendant  evils, 
and  these  are  crowding  in  so  fast  that  our  attempts  to  arrest  them  have  thus  far 
&ten  attended  with  slight  success.    We  have  no  quarrel  with  well  regulated  rail- 
roads.   There  ought  to  be  no  antagonism  between  us.    They  are  the  People's  high- 
way; by  their  aid  we  are  all  neighbors.    Our  war  is  with  abuses.    Let  us  examine 
-*obm  of  them.    There  are  in  this  State  nominally  $254,000,000  invested  in  railroad 
property;  no  other  single  interest  represents  snch  an  aggregate  of  wealth.    All  this 
immense  sum  is  capable  of  being  controlled  and  directed  by  a  few  individuals. 
Xia  all  questions  where  railroad  interests  conflict  with  the  interest  of  the  public, 
the  influence  of  this  wealth  is  a  unit  against  the  people.    It  is  the  organized,  dis- 
ciplined, and  well  equipped  army,  against  the  unorganized,  unarmed,  and  unofficered 
militia.  %  It  employes  great  armies  of  men  in  operating  the  various  lines  of  road. 
Xt  u  the  best  customer  to  the  press;  it  controls  the  telegraph  lines;  has  the  readiest 
$03688  to  the  public  ear,  and  is  the  all-powerful  abettor  or  the  terrible  foe  to  politi- 
aspirations;  it  pays  the  best  price  and  calls  to  its  aid  the  best  financial  ability  of 


7 


the  country;  in  every,  county  town  where  a  railroad  line  is  located,  it  keeps  in  its 
•employ  the  best  legal  ability.    By  means  of  its  extensive  connections,  its  reports, 
its  perfect  and  systematic  organization,  it  obtains  more  accurate  information  about 
the  condition  of  the  country  than  can  be  secured  by  any  other  interest.    A  railroad 
corporation  is  soulless,  and  yet  immortal.    Wiser  than  philosophy,  it  has  found  in  a 
perpetual  charter  the  elixir  of  life.    When  our  fathers  abolished  the  law  of  primo- 
geniture they  supposed  tha  country  was  secured  against  the  evils  of  vast  individual 
wealta  accumulating  from' generation  to  generation,  because  the  certainty  of  death 
would  bring  certainty  of  destruction.    But  a  perpetual  charter,  granted  without 
oonsideration,  has  become  a  spindle  to  twist  the  gossamer  thread  across  the  chasm 
of  death.    All  this  vast  and  constantly  augmenting  wealth  is  under  irresponsible 
control.    A  corporation  can  neither  be  hung  nor  sent  to  the  penitentiary;  that  is  to 
say,  there  is  an  entire  absence  of  individual  responsibility.    Vigorous,  alert,  all- 
powerful  and  perpetual,  it  only  needs  unscrupulous  managers  to  become  a  worse 
tyrant  than  Nero— a  mora  dangerous  master  than  Robespierre.    Need  I  say  to  this 
Convention,  that  it  i-s  in  the  power  of  the  Railroad  Corporations  unrestrained  by 
law,  to  bankrupt  the  Northwest  in  less  than  three  years. 

The  commerce  of  the  country  has  already  felt  the  evils  of  the 
concentration  ""of  wealth  alluded  to  above.  Throughout  the  year, 
but  more  especially  at  the  season  when  the  crops  are  moved,  combi- 
nations are  made  by  our  railway  autocrats  which  create  an  artificial 
stringency  in  our  money  markets  which  enables  them  to  wring  still 
another  tax  from  the  pockets  of  the  commercial  classes,  and  which 
in  turn  reacts  upon  producers  and  consumers  throughout  the  land. 
Hon.  Josiah  Quincy,  of  Boston,  in  a  speech  made  at  the  convention 
of  Western  producers,  held  in  this  city  May  6th  and  7th,  filly  com- 
pared our  railway  kings  to  the  robber  barons  of  the  middle  ages, 
who  took  toll  from  all  who  passed  their  castles  ;  but  added,  that  "it 
was  reserved  for  private  citizens  of  the  nineteenth  century  to  devise 
a  plan  by  which  all  the  people  of  the  country,  far  and  near,  whether 
they  travelled  or  not,  were  compelled  to  pay  tribute." 

The  foregoing  are  some  of  the  causes  which  have  brought  this 
question  so  abruptly  and  prominently  before  the  country  and  started 
the  great  movement  at  the  West,  which  has  already  assumed  so 
much  prominence.  That  the  West  is  fully  aroused  to  the  importance 
of  the  question  is  shown  by  the  visit  of  delegates  from  their  associa- 
tions to  this  city  for  the  purpose  of  forming  a  National  organization 
and  arousing  the  East  to  action.  At  that  meeting,  which  wa3  held 
at  the  Astor  House  May  6th  and  7th,  delegates  were  present  from 
nine  Western  States.  Many  of  these  men  had  never  seen  each  other, 
and  it  was  evident  that  they  did  not  know  with  whom  to  communi- 
cate to  advance  the  interests  of  the  cause  in  New  York  ;  but  there 
was  an  earnestness  about  their  every  action  ft  Inch  told  of  their  de- 


termination  to  do  something,  and,  as  a  result,  a  creditable  Vational 
organization  was  effected  as  a  nucleus  for  further  work. 

Letters  were  received  from  Gov.  John  A.  Dix,  Gov.  James  IL 
Smith,  of  Georgia  ;  Gov.  C.  C.  Carpenter,  of  Iowa  ;  Hon.  William 
Windom,  United  States  Senator  from  Minnesota  ;  Hon.  D.  M,  Du- 
boise,  Georgia  ;  J.  B.  Hawley,  Illinois  ;  A.  H.  Buckner,  Missouri ; 
B.  W.  Frobel,  Georgia  ;  John  A.  Kasson,  Iowa  ;  Charles  Francis 
Adams;  Hon.  John  Davis,  President  Farmers'  Co-operative  Union, 
Kansas  ;  Geo.  M.  Stevens,  Secretary  of  the  Farmers'  Association, 
Illinois ;  Hon.  S.  E.  Moore,  Illinois ;  Geo.  W.  Peek,  Wisconsin  ;  A. 
M.  McKeel,  Fairfax  Grange  Patrons'  Husbandry,  Iowa ;  N.  F. 
Graves,  Kansas,  and  others.  Numerous  telegrams  were  received 
from  commercial,  industrial,  and  manufacturing  associations  from  all 
parts  of  the  country  approving  of  the  call  for  the  Convention  and 
bidding  it  godspeed. 

The  following  officers  were  elected  for  the  ensuing  year: 

President — Hon.  Josiah  Quincy,  Boston,  Mass. 

Secretary — R.  H.  Ferguson,  Troy,  New  York. 

Treasurer — F.  B.  Thurber,  New  York  City. 

Vice-Presidents — Lewis  A.  Thomas,  Iowa;  Henry  Branson,  Kan- 
sas; Gen.  West,  Wisconsin;  W.  M.  Burwell,  Louisiana;  Gov.  Smith, 
Georgia;  J.  A.  Thomson,  West  Virginia;  Adelbert  Ames,  Mississippi; 
George  J.  Post,  New  York;  J.  B.  Phinney,  Illinois;  W.  S.  Wood, 
Ohio;  E.  0,  Stannard,  Missouri;  J.  H.  Gray,  District  of  Columbia; 
J.  E.  Stetson,  New  Jersey;  F.  C.  Johnson,  Indiana;  A.  Morrison, 
Minnesota;  A.  G.  Dodge,  Vermont;  E.  Wakeley,  Nebraska;  ex-Gov^ 
Paddleford,  Rhode  Island;  Gen.  T.  C.  Hersey,  Maine;  J.  B.  Sargent, 
Connecticut;  M.  D.  Wilbur,  Michigan;  J.  M.  McArthur,  Kentucky; 
Daniel  Pratt,  Alabama;  Henry  G.  Hall,  North  Carolina;  Colonel 
Palmer,  South  Carolina. 

A  constitution  and  by-laws  were  reported  and  adopted.  The  con- 
stitution provides  that  the  organization  shall  be  known  as  the  "  The 
American  Cheap  Transportation  Association,"  whose  object  shall  be- 
the  cheapening  and  equalization  of  railroad  transportation  rates 
throughout  the  United  States.  It  provides  for  a  subordinate  associ- 
ation in  each  State,  and  regulates  minor  matters  for  the  guidance  and 
government  of  the  National  and  State  Associations. 

The  Committee  on  Resolutions  reported  the  following,  which  were 
adopted: 

W  hereas,  The  productive  industries  of  the  States  plantation  and  farm,  mine  and 


9 


factory,  commercial  and  mercantile — are  not  only  the  sources  of  all  our  national 
and  individual  wealth,  but  also  the  elements  on  which  our  very  national  and  indi- 
vidual existence  depends  ;  and 

Whereas,  All  material  products  are  the  fruits  of  labor  and  capital,  and  as  neither 
labor  nor  capital  will  continue  actively  employed  without  an  equivalent  measurably 
just ;  and 

Whereas,  Great  national  industries  are  only  sustained  and  prospered  by  the  inter- 
change of  the  products  of  one  section  of  country  for  those  of  another;  and 

Whereas,  The  existing  rates  of  transportation  for  the  varied  products  of  the 
Union,  from  one  part  of  the  country  to  another,  and  to  foreign  countries,  as  well  as 
the  transit  cost  of  the  commodities  required  in  exchange,  are,  in  many  instance* 
injurious,  and  to  certain  interests  absolutely  destructive,  arising,  in  part,  at  least, 
from  an  insufficiency  of  avenues;  and 

Whereas,  The  great  material  want  of  the  nation  to-day  is  relief  from  the  present 
rates  of  transit  on  American  products;  therefore, 

Resolved,  That  the  duty  of  the  hour  and  the  mission  of  this  association  is  to  obtain 
from  Congress  and  the  several  State  Legislature  such  legislation  as  may  be  necessary 
to  control  and  limit  by  law,  within  proper  constitutional  and  legitimate  limits,  the 
rates  and  charges  of  existing  lines  of  transportation  ;  to  increase,  where  practic- 
able, the  capacity  of  our  present  waterways,  and  to  add  such  new  avenues,  both 
water  and  rail,  as  our  immensely  increased  internal  commerce  demands;  so  that  the 
producer  may  be  fairly  rewarded  for  his  honest  toil,  the  consumer  have  cheap  pro- 
ducts, and  our  almost  limitless  supplies  hnd  foreign  markets  at  rates  to  compete 
with  the  world. 

Resolved,  That  the  cheap  trarsportation,  both  of  persons  and  property,  being 
most  conducive  to  the  free  movement  of  the  people,  and  the  widest  interchange  and 
consumption  of  the  products  of  the  different  parts  of  the  Union,  is  essential  to  the 
welfare  and  prosperity  of  the  country. 

Resolved,  That  the  constant  and  frequent  association  of  the  inhabitants  of  re- 
mote parts  of  the  United  States  is  not  only  desirable  but  necessary  for  the  main- 
tenance of  a  homogeneous  and  harmonious  population  within  the  vast  area  of  our 
territory. 

Resolved,  That  the  best  interests  of  the  different  parts  of  the  country  also  demand 
the  freest  possible  interchange  of  the  industrial  products  of  the  varied  climates  and 
industries  of  the  United  States,  so  that  breadstuffs,  textile  fabrics,  coal,  lumber, 
iron  sugar  and  various  products,  local  in  their  production,  but  general  in  their 
consumption,  may  all  reach  the  consumer  at  the  least  practicable  cost  of  transpor- 
tation; and  that  an  arbitrary  and  unnecessary  tax,  levied  by  the  transporter,  over 
and  above  a  fair  remuneration  for  the  investment,  is  a  burden  upon  the  producer 
and  consumer  that  it  is  the  part  of  wise  statesmanship  to  remove. 

Resolved,  That  certain  leading  railway  corporations  of  the  country,  although 
chartered  to  subserve  the  public  welfare,  and  endowed  with  the  right  of  eminent 
domain,  solely  for  that  reason,  have  proved  themselves  practically  monopolies,  and 
become  the  tools  of  avaricious  and  unscrupulous  capitalists,  to  be  used  to  plunder 
the  public,  enrich  themselves,  and  impoverish  the  country  through  which  they 
run. 

Resolved,  That  many  of  the  railway  corporations  of  the  United  States  have  not 
only  disregarded  the  public  convenience  and  property,  but  have  oppressed  the 
citizens,  bribed  our  legislators,  and  defied  our  executives  and  judges;  and  stand  to- 
day the  most  menaciog  danger  to  American  liberty  and  to  Republican  govern- 
ment. 


10 


Brsolved,  That  the  present  system  of  railway  management  having  failed  to  meet 
the  just  expectations  and  demands  of  a  long-suffering  people,  must  be  radically 
reformed  and  controlled  by  the  strong  hand  of  law,  both  State  and  national,  and 
railway  corporations  compelled  to  perform  their  proper  functions  as  the  servants 
and  not  the  masters  of  the  people. 

Resolved,  That  to  this  end  we  invoke  the  aid  of  all  fair-minded  men  in  all  States 
of  the  Union  in  expelling  and  excluding  from  the  halls  of  legislation,  from  our 
executive  offices,  and  from  the  Bench  such  railway  officials,  railway  attorneys, 
or  other  hirelings  as  prostitute  public  office  to  the  base  uses  of  private  gain. 

Resolved,  That  leaving  different  section  and  interests  that  desire  cheap  transpor- 
tation to  work  out  the  problem  in  such  a  manner  as  they  may  deem  best,  we  earn- 
eastly  invoke  their  careful  consideration,  their  energetic  action,  and  their  resolute 
will  in  regulating  and  controlling  the  rates  of  transportation  and^  giving  remunera- 
tive wages  to  the  producer  and  cheap  products  to  the  consumer  untaxed  by  unearned 
charges  for  their  carriage. 

Resolved,  That  we  invite  the  people  of  the  various  States  to  organize  subsidiary 
associations — State,  county  and  town-  to  co-operate  with  the  national  association; 
that  the  power  to  accomplish  the  purposes  desired  rests  absolutely  with  the  suffer- 
ing millions;  that  relief  is  in  their  reach  and  control  by  united  action,  and  the 
near  future  will  give,  as  certain  as  its  need  for  all  time  and  the  good  of  all,  the  true 
solution  of  the  problem  of  cheap  transportation. 

THE  OBJECT  OP  SUCH  AN  ASSOCIATION. 

In  pursuance  of  the  spirit  of  the  last  resolution,  it  is  proposed  to 
organize  in  this  city  an  auxiliary  association  from  among  the  substan- 
tial merchants,  who  represent  so  large  a  portion  of  the  commerce  of 
the  nation.  When  we  reflect  upon  the  immense  sums  paid,  by  our 
merchants  and  their  customers  for  transportation,  and  how  insepar- 
ably our  business  interests  are  linked  with  this  question,  it  is  a  matter 
of  wonder  that  busines?  men  have  not  before  formed  an  association 
to  protect  their  interests  against  the  compactly  organized  combina- 
tions which  the  railways  have  made,  in  order  that  they  might  dictate 
terms  to  shippers  and  receivers  of  freight. 

We  will  premise  that  the  general  prosperity  of  the  whole  country 
means  the  prosperity  of  the  great  commercial  city  of  New  York, 
and  when  from  any  cause  the  producers  of  t'his  country  are  unable 
to  buy  and  pay  for  the  articles  we  manufacture,  import,  or  deal  in, 
it  means  stagnation  in  trade  and  commerce,  and  a  decline  in  the 
prosperity  of  our  city.  The  same  is  true  of  ourselves  when  other 
cities  of  the  seaboard  can  offer  to  interior  merchants  and  consumers 
goods  of  equal  quality  and  price,  which  by  virtue  of  cheaper  trans- 
portation facilities,  can  be  delivered  to  remote  sections  of  our  great 
country  for  less  money  than  the  same  goods  would  cost  if  purchased 
in  New  York;  and  that  the  latter  is  the  case  many  of  our  merchants 


1 

11 

know  to  their  cost.  Therefore  we  state  the  object  of  our  asso- 
ciation to  be  to  advocate  such  principles  and  projects  in  connection 
with  the  subject  of  transportation  as  will  tend  in  our  judgment  to* 
wards  the  prosperity  of  our  country  and  city. 

WHAT  such;an  association  can  accomplish. 

Our  country  is  so  vast  and  our  system  of  transportation  so  im- 
mense, the  abuses  so  many  and  so  well  intrenched,  that  any  local  asso- 
ciation, even  such  a  one  as  would  represent  the  majority  of  the  com- 
mercial wealth  and  influence  of  New  York,  would  be  powerless  to  ac- 
complish a  general  reform.  A  majority  of  our  legislators  at  this 
time  are  thought  to  be  in  the  interest  of  the  present  monopolies,  who 
rest  secure  in  their  ability  to  control  legislation  such  as  they  may  de- 
sire. But  in  this  country  the  people  are  the  fountainhead  of  power, 
and  no  abuse  or  system  of  abuses  can  withstand  the  organized  power 
of  a  mnjority  of  the  people  to  abate  them.  Probably  nine  tenths  of 
the  people  of  the  United  States  are  in  some  way  producers  or  con- 
sumers, and  their  interests  are  antagonistic  to  the  abuses  of  our 
present  railway  system.  They  have  been  quiet  under  these  evils  so 
long  as  they  have,  because  the  great  natural  resources  of  the  country 
and  her  general  prosperity  enabled  them  to  subsist  without  diffi- 
culty; but  they  have  now  awoke  to  the  fact  that  when  they  granted 
sweeping  privileges  to  railway  corporations  they  opened  the  door  to 
abuses  which  have  grown  so  that  to  effectually  abate  them  through- 
out the  whole  country  will  require  the  exercise  of  their  united 
strength. 

The  result,  however,  will  not  be  thought  doubtful  by  any  one  who 
has  noted  the  rapidity  with  which  the  work  of  organization  through- 
out the  country  has  progressed  during  the  past  few  months,  and  it 
seems  almost  certain  that  Congress  at  its  next  session  will  be  called 
Vr^or>  to  pass  a  general  railway  law  designed  to  remedy  the  more 
fla.g:ant  abuses  of  the  present  system;  and  also  the  Government  will 
undoubtedly  be  obliged  to  undertake  a  system  of  public  works  de- 
signed to  furnish  greater  facilities  for  transportation  between  the 
East  and  the  West. 

THE  QUESTION  OP  WHAT  PROJECTS  WILL  BE  UNDERTAKEN 

is  of  great  interest  to  every  merchant,  manufacturer,  or  real  estate 
owner  in  this  city.  The  Southwest  is  pushing  the  project  of  an 
improvement  in  the  navigation  of  the  Mississippi  River,  thus  obtain- 
ing an  outlet  via  New  Orleans;  a  Congressional  excursion  party  has 


12 

recently  inspected  this  route,  under  the  auspices  of  the  city  of  St.  Lonis. 
A  convention  ot  Governors  has  been  held  at  Atlanta  to  consider 
the  advisability  of  a  canal  through  Georgia  to  the  port  of  Brunswick 
or  Savannah.  The  middle  section  of  the  Western  States  are  advo- 
cating a  canal  through  Virginia  uniling  the  waters  of  the  Kanawha 
and  James  Rivers,  while  the  Northwest  is  pushing  a  system  of  im- 
provements, prominent  among  which  are  the  Michigan  Ship  Canal 
and  a  canal  around  Niagara  Falls.  The  project  of  a  new  canal 
through  our  own  State,  uniting  the  waters  of  Lake  Champlain  and 
the  Hudson,  was  put  forward  in  our  last  Legislature,  but  as  it  had 
not  been  sufficiently  studied  and  considered  was  postponed  until  next 
session.  All  the  above  mentioned  schemes  are  as  yet  only  on  paper, 
but  Canada,  in  pursuance  of  a  law  passed  by  the  last  Dominion  Par- 
liament, is  at  work  enlarging  the  Welland  Canal,  which  as  soon  as 
completed  will  undoubtedly  add  largely  to  the  considerable  amount 
of  trade  she  has  already  diverted  from  New  York. 

All  of  the  above  contemplate  transportation  by  canal,  but  there 
are  many  practical  and  shrewd  men  who  think  that  the  reliel  we  seek 
must  come  from  developing  and  improving 

OUR  SYSTEM  OF  RAILWAYS. 

As  at  present  conducted,  freight  is  carried  over  passenger  roads, 
and  all  our  calculations  of  the  capacity  of  railways  for  freight  pur- 
poses and  the  cost  of  such  transportation  have  been  based  upon  the 
result  of  such  mixed  traffic.  When  we  reflect  that  freight  trains  are 
obliged  to  keep  out  of  the  way  of  passenger  trains,  and  under  favor- 
able conditions  cannot  run  more  than  one  quarter  of  the  time,  we  can 
see  under  wF  at  a  disadvantage  we  labor.    With  a  double  track  road 

o 

exclusively  for  freight,  goods  can  be  laid  down  in  Chicago,  Cincin- 
nati or  St.  Louis  from  New  York  in  about  three  days,  while  the 
average  time  at  present  is  about  ten  days,  the  saving  in  interest  alone 
upon  the  immense  value  of  goods  constantly  in  transit  would  in  a 
few  years  go  far  towards  paying  the  cost  of  constructing  such  a  road, 
to  say  nothing  of  the  saving  in  the  expense,  estimated  by  good  judges 
at  one-half  the  present  rates.  If  the  delays,  uncertainties  and 
expense  of  the  present  system  were  thus  modified,  New  York  mer- 
chants could  increase  their  business  relations  with  the  West  to  an 
almost  unlimited  extent ;  Western  merchants  could  carry  smaller 
stocks  and  do  business  upon  less  capital,  and,  indeed,  such  a  road 
would  be  a  financial  safety  valve  to  the  whole  country,  because  g:  ain 
and  other  produce  could  be  forwarded  to  the  East  at  all  seasons 


13 


instead  of  accumulating  at  the  principal  Western  shipping  ports 
during  the  Winter  as  it  now  does,  tying  up  vast  amounts  of  capital 
which,  if  liberated,  could  be  kept  in  motion  supplying  the  West  with 
the  manufactures  of  the  East,  and  the  East  with  the  produce  of  the 
West.  Our  wise  financiers  who  think  there  is  a  radical  wrong  in 
our  present  system  of  finance  would  do  well  to  consider  how  far  our 
transportation  system  is  responsible  for  the  stringencies  and 
fluctuations  in  our  money  market.  Every  business  man  knows  that  a 
small  capital  often  turned  will  do  as  much  business  as  one  double  the 
size  turned  half  as  often. 

In  connection  with  this  question  the  following  estimate  of  tne 
relative  capacity  of  canals  and  railways  devoted  exclusively  to 
freight,  made  by  Hon.  Josiah  Quincy  and  published  in  a  communica- 
tion to  the  Boston  Advertiser,  may  be  of  interest: 

As  you  state  in  a  recent  editorial,  I  advocate  the  purchase  of  one  line  of  railroad 
by  the  State  for  the  purpose  of  reducing  by  competition  the  price  of  freights,  even 
if  it  should  lessen  the  profits  of  existing  railroads.  Without  alluding  to  the  partic- 
ular case  now  before  the  Legislature,  I  wish  to  consider  the  question  in  a  broad 
national  point  of  view.  There  are  between  Boston  and  Chicago  about  seventy 
millions  of  watered  stock,  for  which  the  shareholders  never  paid  a  cent,  but  on 
which  they  levy  a  tax  of  millions  on  the  public  in  the  shape  of  exorbitant  fares.  I 
do  not  believe  that  this  state  of  things  can  be  permanent,  and  think  it  the  duty  of 
our  statesmen  to  endeavor  to  find  a  peaceful  remedy.  My  remedy  is  the  owning  and 
control  of  one  or  more  of  the  great  thoroughfares  of  the  country,  either  by  the 
State  or  the  United  States. 

Th«  first  great  objection  is  the  danger  that  corrupt  men  will  influence  our  legis- 
lators for  their  own  profit.  Instead  of  an  argument,  I  will  take  the  case  of  the 
Erie  Canal.  Here  is  a  thoroughfare,  built,  owned  and  managed  by  New  York.  By 
the  constitution  of  the  State,  it  can  neither  be  sold  or  leased,  but  must  be  forever  open 
to  free  use  of  any  one  who  puts  a  boat  upon  it  and  pays  the  regular  toll.  What  has 
been  the  corruption  resulting  from  State  ownership  and  management  of  this  great 
property,  when  compared  with  what  has  resulted  from  the  owners  and  managers  of 
private  incorporated  railroads  ?  Let  the  venal  legislators  of  New  York  answer.  As 
*  a  financial  operation  it  has  been  attended  with  complete  success,  the  main  Erie  hav- 
ing paid  *br  itself  many  times  over.  Governor  Fenton,  in  one  of  his  messages 
states: 

"  The  Erie  Canal  has  now,  and  has  had  since  1860,  a  tonnage-carrying  capacity  of 
four  millions  of  tons  in  each  direction,  east  and  west,  during  an  ordinary  season  of 
navigation  of  seven  and  one-half  months.  In  arriving  at  these  results  I  have 
assumed  that  this  thoroughfare  was,  at  all  times,  during  the  season  of  navigation,  in 
proper  order,  the  locks  in  good  condition,  constantly  in  a  working  state  and 
promptly  and  efficiently  attended  by  an  adequate  number  of  men.  The  above  esti- 
mate is  based  on  continuous  work  day  and  night,  and  employing  the  whole  ceven 
days  in  the  week,  according  to  the  custom  on  that  canal.  Upon  th9  same  basis,  but 
running  through  the  whole  twelve  months,  the  railways  would  have  the  following 
capacity  as  compared  with  the  Erie  Canal,  viz: 


14 


"  Erie  Canal,  one  and  a  half  miles  per  hour,  tonnage,  4,000,0)0  tons  each  way 
otal  tonnage  capacity,  8,000,000. 

"Railway,  eight  miles  per  hour  and  two  miles  spacs  between  the  trains,  7,008,000 
tons  each  way;  total  tonnage  capacity,  14,016,000. 

"Railway,  ten  miles  per  hour;  spice,  two  miles  between  trains,  8,760,000  tons 
each  way:  total  tonnage  capacity,  17,520,000. 

" Railway,  ten  miles  per  hour;  space,  one  mile  between  trains;  17,520,030  tons 
each  way;  total  tonnage  capacity,  35,040,000. 

"Railway,  eight  miles  per  hour;  space,  one  mile  between  trains;  14,016,000  tons 
each  way;  total  tonnage  capacity,  28,032,000. 

"Railway,  eight  miles  per  hour;  space,  half  mile  between  trains;  28,032,000  tons 
each  way;  total  tonnage  capacity,  56,064,000. 

"Railway,  ten  miles  per  hour;  space,  half  mile  between  trains;  35,040,000  tons 
eacb  way;  total  tonnage  capacity,  70,080,000. 

"  It  is  not  difficult  to  perceive  tnat  on  a  rate  of  eight  miles  per  hour,  the  speed  at 
which  lateral  friction  nearly  ceases,  a  freight  capacity  four  times  that  of  the  Erie 
canal  can  be  achieved  with  entire  success.  It  only  remains  to  take  care  of  the 
economic  arrangements  to  accomplish  the  redaction  of  freights  in  an  inverse  ratio, 
somewhat  corresponding  to  the  increased  capacity  of  the  road." 

So  much  for  the  comparative  cheapness  and  facility  of  transportation  by  railways 
and  canals.  My  own  opinion  is,  that  ultimately  the  United  States,  acting  under  the 
same  authority  by  which  they  constructed  the  Cumberland  road,  will  own  the  road- 
beds and  stations  of  freight  roads  on  all  the  great  lines,  and,  like  the  Erie  canal, 
throw  them  open  under  regulations  as  regards  regular  and  moderate  speed,  to  any 
person  who  wishes  to  put  cars  and  locomotives  upon  them,  paying,  as  on  the  canal, 
regular  and  fixed  tolls  for  their  use.  With  a  double  track  there  would  be,  on  such 
roads,  under  suoh  regulations  (supplemented  as  they  would  be  by  the  telegraphs)  no 
danger  of  collisions,  and  as  the  cars  would  not  have  to  go  upon  sidings  to  wait  for 
express  trains,  their  speed  would  be  greater  and  the  hour  oi  their  arrival  more 
certain  than  af,  present,  and  there  would  be  an  end  of  complaints  of  shortages 
or  excessive  tariffs,  as  individuals  and  not  corporations  would  be  responsible. 

This  is  a  subject  of  vital  importance  to  the  people  in  every  section  of  our  country, 
and  the  people  in  my  opinion  will  Dever  consent  permanently  to  pay  dividends  on 
millions  of  watered  stock  when  they  can,  by  paying  interest  on  the  actual  cost  of  a 
road-bed,  have  the  reduction  of  freights  that  must  result  from  competition  and  from 
a  free  use  of  the  facilities  it  affords.  Josiah  Quin-ct. 

No  matter  how  much  we  improve  and  increase  our  facilities  for 
canal  transportation,  a  large  portion  of  the  produce  of  the  West, 
such  as  live  stock,  <fec,  as  well  as  much  of  the  manufactures  ot  the 
East,  must  always  be  moved  by  rail,  and  it  would  seem  that  roads 
exclusively  for  freight  are  now  a  necessity.  It  is  said  that  the  New 
York  Central,  and  also  the  Pennsylvania  Railroad,  are  preparing  to 
lay  down  a  double  track  exclusively  for  freight;  doubtless  this 
would  greatly  increase  their  capacity,  but  it  is  also,  probable  that 
Messrs.  Yanderbilt  and  Scott  will  pocket  most  of  the  increased 
earnings,  and  that  the  people  will  get  but  a  very  slight  abatement 

the  charges  now  current  on  those  roads.    A  freight  road  to  be  of 


much  benefit  to  the  people  must  be  built  and  owned  (but  not 
operated)  by  the  Government. 

Such  a  road  built  and  owned  bv  the  National  Government  could 
sot  be  forced  into  combination  with  the  present  monopolies  as  every 
private  line  has  been  which  has  promised  competition  and  been  built 
for  that  purpose,  and  when  such  a  line  had  demonstrated  at  what 
price  freight  could  actually  be  carried  at  a  fair  profit,  the  private  mo- 
nopolies would  have  to  approximate  their  charges  to  those  »of  the 
Government  road.  This  road  should  be  free  to  any  corporation  who 
would  put  rolling  stock  on  it  and  operate  it  under  a  general  railway 
law,  charging  rates  not  over  7  per  cent  on  the  actual  capital  invested. 
Under  such  a  system  New  York  merchants  could  have  a  line  of  their 
own;  Boston,  Philadelphia,  Baltimore,  Cincinnati.  Chicago,  St.  Louis 
and  all  other  principal  cities  and  sections  of  country,  whose  interests 
justified,  could  without  trouble,  stock  a  transportation  company  and 
have  their  freight  carried  for  cost.  We  were  recently  assured  by  the 
President  of  a  company  whose  business  is  to  build  and  let  railway 
rolling  stock  to  various  railways  and  through  freight  lines,  that  such 
a  road  would  be  covered  with  rolling  stock  within  a  year  from  the 
time  of  its  construction,  and  that  additional  roads  would  have  to  be 
built  north  and  south  to  accommodate  the  increase  of  traffic.  Rail- 
ways are  in  accordance  with  the  spirit  of  the  times,  and  the  quickness 
with  which  they  can  be  built  and  the  facilitv  with  which  thev  are 
operated  is  improving  every  year.  , 

An  association  such  as  the  merchants  of  New  York  propose  to  form 
can,  in  connection  with  a  constituency  throughout  the  country,  have 
much  to  say  in  regard  to  what  projects  shall  be  undertaken  and  so  guide 
the  movement,  that  unwise  and  unprofitable  schemes  will  not  be  un- 
dertaken by  Government,  and  the  commercial  interests  of  New  York 
mav  be  looked  after  and  fostered. 

It  is  the  abuses  of  the  present  railway  system,  the  inside  ';  rings," 
the  swindling  management,  the  "  Credit  Mobilier  "  freisrht  lines,  and 
the  watering  of  stock  which  make  it  necessary  for  railway  companies 
to  charge  the  price  of  four  bushels  of  corn  at  the  place  of  production 
to  get  one  oushel  to  market,  and  we  would  here  ask,  what  is  the  dif- 
ference to  the  producer  whether  he  loses  three-quarters  of  the  pro- 
duct of  his  labor  by  a  failure  in  the  crop,  or  whether  it  is  absorbed 
by  the  above  abuses  ?  And  of  the  commercial  men  of  New  York  we 
would  ask  this  question,  what  is  the  difference  to  you  whether  the 
crops  fail  so  that  you  have  none  to  export,  or  whether  these  abuses 


raise  the  price  at  the  seaooard  so  that  the  world  cannot  afford  to 
buy  them?  In  either  case  you  do  not  do  the  business,  but.  in  the 
latter  case  some  other  city  may — by  providing  facilities  and  avoid- 
ing the  above-named  evils— secure  the  commerce  which  you  lose. 
Importing  merchants,  however,  may  say  that  the  question  does  not 
interest  them,  because  they  do  not  export  any  produce,  but  we  maintain 
that  it  does  interest  them,  because  if  the  producer  does  notfget  any- 
thing for  his  produce  he  will  not  be  able  to  buy  and  pay  for  imported 
goods,  be  they  ever  so  desirable  and  necessary. 

It  is  not  intended  that  this  movement  shall  be  a  political  one,  any 
further  than  the  present  monopolies  compel  it  to  be.  If  our  present 
legislators  are  controlled  by  the  corporations  to  so  great  an  extent 
that  we  cannot  obtain  relief,  then  we  intend  to  have  a  voting  con- 
stituency strong  enough,  so  that  corrupt  legislators  may  be  retired  to 
private  life  and  men  put  in  their  places,  a  majority  of  whom  cannot 
be  bribed  to  betray  the  interests  of  the  people.  It  is  essentially  a 
people's  movement,  for  it  promises  increased  facilities  for  commerce, 
cheaper  food  for  the  people,  a  reform  in  public  morals,  and  is  a  prac- 
tical step  towards  civil  service  reform. 

THE  MORE  IMMEDIATE  RESULTS 

Which  an  association  of  New  York  merchants  can  accomplish  and 
which  alone  are  of  great  value,  are  as  follows:  At  present  New  York 
is  competing  for  the  Trade  of  the  West,  at  a  disadvantage,  with 
Baltimore,  Philadelphia  and  Boston,  and  the  average  rate  from  those 
cities  to  principal  points  West  is  from  15  to  25c.  per  100  lbs.  cheaper 
than  from  New  York  The  reason  for  this  may  be  found  in  the  fact 
that  in  Baltimore  the  Baltimore  and  Ohio  Road  is  largely  owned  by 
Baltimore  merchants  and  is  operated  in  the  interest  of  that  city.  In 
Philadelphia  the  same  may  be  said  of  the  Pennsylvania  Central  Rail- 
road. In  Boston  the  same  is  true  in  regard  to  the  New  England  and 
Grand  Trunk  roads,  while  in  New  York,  the  great  metropolis  of  the 
natioL,  the  trunk  lines  to  the  West  are  owned  by  a  clique  of  stock 
jobbers  who  have  no  possible  interest  in  the  commerce  of  the  city' 
beyond  squeezing  the  largest  possible  amount  from  it  that  can  be  ob- 
tained, regardless  of  the  fable  of  the  G  oose  and  the  (Golden  Egg.  It 
is  a  well  known  fact  that  during  the  past  year  large  quantities  of 
goods  have  been  shipped  from  New  York  to  the  West  via  Boston. 
Such  a  state  of  things  is  anomolous,unjust  and  reflects  but  little  credit 
upon  the  ability  and  enterprise  of  the  merchants  of  New  York. 
Tbe   combined  influence  of  500  or  1,000  prominent  New  York 


17 

houses  can  doubtless  remedy  the  matter,  and  if  no  redress 
can  be  obtained  in. this  way  we  ought,  without  difficulty,  to  control 
capital  when  combined  with  our  Western  connections  to  build  a 
Merchants'  Boad  to  competing  points  West.  It  is  not  probable, 
however,  that  such  a  contingency  will  arise,  because  when  we  show 
our  power  we  can  obtain  redress.  The  transportation  companies- 
have  always  had  a  combination,  co-operating  with  each  other  for 
their  mutual  profit.  Why  should  not  the  merchants  do  the  same 
thing  ? 

Such  an  association  could  also  deal  with  the  minor  abuses,  such  as 
classifications,  shortage,  breakage,  stealage,  and  the  sudden  and 
unlooked-for  changes  in  freight  tariffs  which  operate  to  prevent  buy- 
ers from  coming  to  this  market,  because  his  freight  may  be  advanced 
fifty  per  cent  in  a  single  day.  Careful  attention  to  this  part  of 
our  business  will  develop  many  advantages  which  are  not  at  present 
noticed,  but  the  great  benefit  to  be  derived  will  be  in  building  up  and 
holding  our  trade  against  other  cities  which  have  been  diverting  it. 

New  York  has  become  a  very  expensive  port  of  entry  for  import- 
ing merchants  to  bring  their  goods  to.  Our  quarantine  charges 
cooperage,  lighterage,  cartage,  storage  and  labor  are  all  higher  than 
they  should  be,  and  it  comes  directly  within  the  province  of  such  an 
association  as  we  propose  to  form,  to  deal  with  and  modify  or  re- 
move them. 

GENERAL  REFLECTIONS. 

The  question  of  transportation  is  one  of  great  moment  and  must 
engross  the  attention  of  Statesmen,  political  economists  and  mer- 
chants for  some  time  to  come,  and  it  is  certainly  worthy  the  attention 
of  the  best  minds  of  our  country.  There  are  many  important  ques- 
tions nearly  allied  to  it  such  as  the  Tariff  and  the  Labor  question,  both 
of  which  are  likely  to  come  to  the  front  in  the  approaching  contest. 
To  deal  with  them  judiciously,  needs  careful  attention  and  considera- 
tion. To  do  this  requires  organization,  and  there  is  no  time  to  lose 
in  setting  about  it.  It  must  not  be  left  to  the  care  of  committees  in 
existing  trade  bodies,  but  there  must  be  an  organization  formed  for 
that  special  object;  it  should  combine  the  greater  part  of  our  mer- 
cantile wealth,  character  and  ability,  in  an  association  commensurate 
with  the  magnitude  and  importance  of  the  subject  with  which  it  is 
intended  to  grapple.  That  this  can  be  done,  and  will  be  done  as 
soon  as  our  merchants  glance  at  the  situation  seems  a  certainty. 


» 


lEx  ICtbrta 


SEYMOUR  DURST 


FORT   NEW  AMSTERDAM. 


(new  york)  ,  1651. 


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Avery  Architectural  and  Fine  Arts  Library 
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